Friday, August 28, 2009

The finances of the over-50s under pressure

Yesterday’s media was full of bad news about the finances of the 50-plus.

The BBC covered the research from Scottish Widows that found that those retirees with outstanding non-mortgage debt owed an average of £7,344, up from £6,732 in the same poll a year ago.

Also, it is getting harder to ditch the financial burden of children with 7% of retirees stating they are still paying towards the upkeep of their adult children

The most concerning ‘fact’ was the finding that 15% of retired people were also still paying off a home loan, with an average debt of £50,100, up £8,000.

The same research is covered in the Daily Telegraph except this time the focus is on the way the Finance Industry is reducing the maximum age they will lend to, with many introducing a cap of 65 years old.

As a result, retired home owners with a mortgage are struggling to find new deals and face being evicted from their properties if they do not have the cash to pay off their remaining home loan with one lump sum. I suspect there is a bit of journalist licence in this statement.

Finally, The Daily Mail reports the way the recession means “millions of people” are having to delay their retirement plans.

The paper says:
Nearly two million people have been forced to put off retirement after seeing their pension funds plummet.

More than a third of those in jobs and over 55 plan to keep working until the stock market recovers, pulling their retirement income back up with it.

Almost a quarter of this age group now expect to work beyond the state pension age of 65, while 32% admitted they were not prepared at all for retirement.

All in all, yesterday was a good day to miss reading the papers. A couple of caveats. Yes, yes there is truth in all of these reports but be beware of PR research since you be sure it will be presented to favour the company involved.

Secondly, don’t generalise from the specific. The UK has a lots of young people who are not in employment or training but a lot more who are.

Still, none of this is good news. Dick Stroud

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